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Chapter 17

Chapter 17 BU385.docx

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Department
Business
Course
BU385
Professor
Paul Iyogun
Semester
Fall

Description
BU385 Chapter 17 – Project Management Week 10/11 Introduction -Project – a unique, large, one-time job requiring special activities to accomplish a specific objective in a limited time frame -A program is a set of projects -Projects may involve considerable cost -Performance goals- for a project: keeping the project within schedule, budget, and quality guidelines -Projects must be authorized, their objectives and scope must be established, a project manager should be appointed, and the project must be planned -Projects go through a series of stages or phase – a life cycle – which include project initiation, planning and scheduling, execution, control, and closeout -The following steps are for project selection: 1. Establish a project council 2. Identify some project categories and criteria 3. Collect projects data 4. Assess resources availability 5. Prioritize the projects within categories 6. Select projects to be funded 7. Communicate the results to stakeholders and provide the reasons for selection or non- selection of each project -Project planning determines how the project is to be undertaken, and includes breaking down the job into smaller components , determining the resources needed and estimating their costs, scheduling the activities involved or subcontracting the work, planning risk management, and planning material purchases -Project execution involves purchasing the material, and using team members and subcontractors to perform the activities/tasks -Matrix organization- an organizational structure that temporarily groups together specialists from different departments to work on special projects The Project Manager’s Job -Project manager- the person responsible for planning, scheduling, executing, and controlling a project from inception to completion, meeting the project’s requirements and ensuring completion on time, within budget, and to the required quality standards -Responsible for: 1. The work, so that all of the necessary activities are accomplished in the desired sequence and performance goals are met 2. HR, so that those working on the project have direction and motivation 3. Communications, so that everybody has the information they need to do their work 4. Quality, so that the specific objective is realized 5. Time, so that the project is completed on schedule 6. Costs, so that the project is completed within budget -The project manager must coordinate and motivate people who sometimes owe their allegiance to other managers in their functional areas -Ethical issues often arise with projects such as understating costs, worker safety, Project Planning -Project planning- analyzing the project into work packages and activities, estimating resources needed and durations, scheduling, etc. -It is important to determine the details of work to be done (scope), to formally obtain acceptance of the detailed scope from project customer/sponsor and later, during execution and control, to control the changes to the project scope BU385 Chapter 17 – Project Management Week 10/11 -Quality planning involves determining how product quality is to be assured and controlled -Communications planning involves determining the nature of information needed by stakeholders and how to satisfy these needs -Purchase planning involved determining what to purchase, the statement of work, or the specification of the item, supplier evaluation and selection, and the award of contract Risk Management Planning -Risks are inherent in projects -In some instances, there is a risk that events will occur that will cause a project to be terminated -The probability of occurrence of risk events is highest near the beginning or a project and lowest near the end -Good risk management entails identifying as many potential risks as possible, analyzing and assessing those risks, and planning a response to avoid, transfer, or mitigate the risk -Risk response includes: -Redundant (backup) systems – Ex. An emergency generator to supply power in the event of failure -Using a less complex process or a more stable supplier -Frequent monitoring or critical project aspects with the goal of catching and eliminating problems in their early stages, before they cause extensive damage -Transferring risks, say by outsourcing a particular component of a project and requiring performance bonds -Risk-sharing – Ex. In an oil and gas consortium -Extending the schedule, creating contingency funds, reducing project scope, clarifying the requirements, obtaining information, and improving communications Work Breakdown Structure -Work breakdown structure (WBS) – a hierarchical listing of what must be done during a project -Step 1: Identify the major components of the project -Step 2: Identify the major subcomponents for each of the major components -These steps are repeated until each subcomponent is decomposed into work packages; a work package can be performed by a worker, team, or subcontractor, is broken down into a list of activities that will be needed to accomplish it Project Scheduling -Project scheduling- determining the timing of activities of the project Gantt Chart -Visual aid for scheduling and control of the activities of a project -Popular tool for scheduling and control of simple projects -Enables a manager to schedule the activities and then to monitor their progress over time by comparing their planned progress to their actual progress -The chart indicates which activities are to occur, their planned duration, and when they are to occur -As the project progresses, the manager is able to see which activities are ahead of schedule and which are behind -See Figure 17.2 p. 619 for a Gantt Chart PERT/CPM Technique -PERT – Program evaluation and review technique, used for scheduling and control of large projects -CPM – Critical path method, used for scheduling and control of large projects -Using these, managers are able to obtain: BU385 Chapter 17 – Project Management Week 10/11 1. A graphical display of project activities and their sequential relationship 2. An estimate of how long the project will take 3. An indication of which activities are most critical to timely project completio
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